Source: Cryptographic Yao

Bitcoin (BTC) prices have taken a hit, dropping 7% and falling below $52,900 for the first time in over a month. This sudden decline has raised questions among investors and cryptocurrency enthusiasts. There are many factors that have contributed to this sharp drop, and understanding these factors is crucial for predicting the next move for Bitcoin.

US employment data contributes to the decline of Bitcoin.

One of the main reasons for the decline in Bitcoin is the release of US labor market data. Non-farm payroll data shows that the US added only 0.142 million jobs, which is below Wall Street's expectations. The unemployment rate remains at 4.2%, which is of concern to investors.

Weak employment data often signals an economic slowdown, leading investors to become cautious. This increases the volatility of Bitcoin and causes its price to drop along with other risky assets.

Institutional fund outflows surge.

Another key factor in the decline of Bitcoin is the significant outflow of funds from spot Bitcoin exchange-traded funds (ETFs). Data from Lookonchain shows that on September 6, the outflow of funds from 10 Bitcoin funds exceeded $0.22782 billion, with Fidelity's FBTC fund leading the way.

Despite such a massive sell-off, BlackRock remains neutral and has not bought or sold Bitcoin.

Bitcoin miners may be forced to sell.

Bitcoin miners have been hoarding Bitcoin since mid-August. However, as the price of Bitcoin falls below $60,000, there are growing concerns that miners may be forced to sell.

Meanwhile, data from Glassnode shows that if the bearish sentiment continues, the selling pressure on miners may increase, further adding to the market pressure.

Worries about economic recession intensify.

Concerns about the possibility of the United States entering an economic recession are also one of the reasons for the decline in gold. Chicago Fed President, Neel Kashkari, recently hinted at the possibility of an economic recession in the US, which has left investors in panic.

Large-scale liquidation in the market.

In addition, the cryptocurrency market has witnessed a wave of large-scale liquidations. In the past 24 hours, a total of 85,882 traders have been liquidated, with a liquidation amount of $314.71 billion. Bitcoin alone has been liquidated for $123.4 billion, with long positions amounting to $83.8 million.

As a result, the fear and greed index for Bitcoin has dropped to 23%, indicating extreme fear in the market. Traders are wondering whether this downturn represents a temporary adjustment or a deeper market slump.